Bo McCarver’s weekly news compilation, 11-10-2010

The federal bailout tab for Fannie Mae and Freddie Mac continues to grow along with unsold inventory of houses. Shares in the mortgage giants continue to drop in value, though not as fast as last year.

Plummeting homes sales in North Texas are treated very different by the Dallas Morning News and the Fort Worth Star-Telegram. The Star-Telegram has worked hard to provide rosy, upbeat news that keeps advertisers happy but readers will have to go to the Morning News to get the real story.

For a pdf version of the full stories, plus contextual articles in social, environmental and legal areas, contact Bo McCarver at bmccarver@austin.rr.com

Mortgage giants could cost U.S. $685 billion

Washington Post November 5, 2010

Fannie Mae and Freddie Mac, the mortgage firms operating under federal conservatorship, may cost taxpayers as much as $685 billion as the United States covers losses and overhauls the housing-finance system, Standard & Poor’s said Thursday.

Costs for resolving the companies could reach $280 billion, including $148 billion already delivered under a U.S. promise of unlimited support, S&P said in a research report. The government may spend another $405 billion to capitalize a replacement for the two companies, which own or insure more than half of the U.S. mortgage market.

“It appears unlikely in our view that housing and mortgage markets will be able to operate normally without continuing and substantial government involvement,” S&P said, citing the companies’ growing portfolio of unsold homes, a sluggish economy, high unemployment, rising foreclosures and billions in legacy losses.

Fannie Mae also said Friday it is likely that the recent foreclosure chaos will have a negative impact on the delinquency rates of its loans, its expenses and foreclosure timelines. Fannie Mae said Friday it lost $3.46 billion, or 61 cents a share, in the July-September quarter. That takes into account $2.1 billion in dividend payments to the Treasury Department, and compares with a loss of $19.8 billion, or $3.47 a share, a year earlier.

The government rescued District-based Fannie Mae and McLean-based sibling Freddie Mac about two years ago, estimating it will cost taxpayers up to $259 billion. That’s nearly twice the $133.4 billion Fannie and Freddie are in line to receive and would make it the most expensive bailout of the financial crisis.

Freddie Mac and Fannie Mae, the mortgage-finance companies operating under U.S. conservatorship, said Tuesday that they have cut ties with a Florida law practice whose filings in foreclosure cases have been questioned.

The companies, which own or guarantee more than half of the U.S. mortgage market, suspended dealings with David J. Stern PA after the firm came under scrutiny from the Florida attorney general’s office amid claims that documents used in home seizures were fraudulent or improperly prepared.

As foreclosures began to mount across the country three years ago, a group of state bank regulators suspected that some borrowers might be losing their homes unnecessarily. So the state officials asked the biggest national banks for details about their foreclosure operations.

When two banks – J.P. Morgan Chase and Wells Fargo – declined to cooperate, the state officials asked the banks’ federal regulator for help, according to a letter they sent. But the Office of the Comptroller of the Currency, which oversees national banks, denied the states’ request, saying the firms should answer only to inquiries from federal officials. In a response to state officials, John Dugan, comptroller at the time, wrote that his agency was already planning to collect foreclosure information and that any additional monitoring risked “confusing matters.”

But even as it closed the door on state oversight, the OCC chose itself not to scrutinize the foreclosure operations of the largest national banks, forgoing any examination of their procedures and paperwork. Instead, the agency relied on the banks’ in-house assessments. These provided no hint of the problems to come until they had tripped the nation’s housing market, agency officials later acknowledged.

For some Florida residents, the price of getting out of foreclosure will include taking on a second mortgage — payable this time to their lawyers.

The new mortgage, which takes effect only if the foreclosure is dismissed and the homeowner’s debt to the bank is reduced, is controversial among defense lawyers, some of whom call it “creepy” and “crass.” Yet even they acknowledge it offers a solution to a vexing question: How do they get paid?

After recent revelations that banks were sloppy in processing many foreclosures and in some cases lack standing to seize a house, potential clients seeking to challenge their lenders are flocking to lawyers. But while these distressed homeowners might have a case, they generally lack the resources to pay legal fees. Being in foreclosure usually means being broke.

“We thought, ‘Why don’t we use a bit of ingenuity to find an affordable way to represent them?’ ” said Peter Ticktin of the Ticktin Law Group in Deerfield Beach, Fla. “It’s a new model, a new paradigm.”

Foreclosure defense is a new legal specialty whose strategies and techniques are still being worked out. Mr. Ticktin, who has some 3,000 foreclosure clients, says his plan to collect fees by taking another mortgage on his clients’ properties has already been copied by other firms.

NORTH LAUDERDALE, Fla. — Save Florida Homes Inc. and its owner, Mark Guerette, have found foreclosed homes for several needy families here in Broward County, and his tenants could not be more pleased. Fabian Ferguson, his wife and two children now live a two-bedroom home they have transformed from damaged and abandoned to full and cozy.

There is just one problem: Mr. Guerette is not the owner. Yet.

In a sign of the odd ingenuity that has grown from the real estate collapse, he is banking on an 1869 Florida statute that says the bundle of properties he has seized will be his if the owners do not claim them within seven years.

A version of the same law was used in the 1850s to claim possession of runaway slaves, though Mr. Guerette, 47, a clean-cut mortgage broker, sees his efforts as heroic. “There are all these properties out there that could be used for good,” he said.

Last month was the fifth consecutive month that Dallas-Fort Worth area home sales were down compared with 2009 levels.

Home sales in the area have cooled since federal tax credits to promote housing purchases expired at the end of April.

Through the first 10 months of 2010, preowned home sales are down 5 percent from the same period in 2009, according to the latest statistics from the Real Estate Center at Texas A&M University and the North Texas Real Estate Information Systems.

Median home sales prices remained stable in October at $146,000 – up 3 percent from a year ago. The increase in overall single-family home prices is likely due to the fact that a larger number of more expensive homes are trading now that the tax benefit that helped first-time sales has lapsed.

Year-to-date median home sales prices in North Texas are up 1 percent.

The number of homes on the market continued to grow in October – up 16 percent from a year ago. There’s just over a 7-month supply of single-family homes listed for sale with local real estate agents.

Existing home sales in North Texas plummeted 30 percent in October, a drop that market economists had expected.

In the 29-county North Texas region, 4,413 homes were sold last month, according to the latest report from Texas A&M University’s Real Estate Center.

It was the fifth straight month of declines compared with a year-ago figures.

Year-to-date sales through October were down 5 percent, the report said.

Only two Tarrant County submarkets saw increases in sales, and two remained unchanged.

The central west area of Fort Worth saw sales climb 24 percent, and Colleyville was not far behind with a 19 percent increase. Kennedale and Southlake saw the same number of sales in October as last year.

The largest decline in sales, 60 percent, was in northeast Arlington.

Economists had been anticipating numbers being way down because home sales spiked about this time last year when the first round of federal tax credits for first-time homebuyers were issued.

The median sales price in October was $146,000, a 3 percent increase from a year ago.

This is part of TheCityFix’s series, “Cities in Flux,” about demographic shifts as a result of development, immigration, migration, politics and the environment. We look at how city planning and transportation policies respond to this movement.

Much of the American Southwest, from Southern California to Arizona, is characterized by urban sprawl, cookie-cutter neighborhoods and endless suburbs, coupled with a population boom across the Sunbelt, as more people, especially Latinos, migrate to the area. Much of the this region is looking at improving mobility, sustainability and quality of life through the lens of “new urbanism,” an approach to urban planning that favors transit-oriented development that might include small lots, houses located close to main roads, front porches, compact neighborhoods, public spaces and parks that focus on building the unique character of a place. Many of these principles have long been evident in Latino-dominant neighborhoods in the U.S., without the top-down knowledge of planners.

The concept of Latino New Urbanism, pioneered by advocate Katherine Perez, is a way of understanding community, public spaces and neighborhoods by acknowledging the preferences and culture of Latino immigrants, which, in many cases, are the majority of residents in certain areas. Latinos have been transforming U.S. communities for decades. Now their impact on planning and transportation in the country is being more formally acknowledged. In other words, Latinos assimilate to U.S. notions of urban development while transforming and adapting often overlooked neighborhoods.

By Brad VogelNational Trust for Historic Preservation November 5th, 2010

What happens when you move history? That’s a question I’ve been asking myself a lot lately.

For over a year, I’ve been following developments in the footprints of the proposed Louisiana State University (LSU) and U.S. Department of Veterans Affairs (VA) hospital complexes in New Orleans, which will be built literally on top of the Mid-City National Register Historic District. I take daily walks through the area, where I’ve witnessed some 30 contributing historic structures lose battles with the bulldozer. I’ve also witnessed something that can only be described as bittersweet – historic homes saved from demolition, but loaded onto mobile platforms and carted away from where they’ve always stretched their roots.

Mark Fischer might not have a fixed address, but he sure has a fixed commute. On Monday morning, Fischer, 47 and unemployed for almost a decade, started his day as he always does: rolling out of bed at 6:15 a.m., pulling on his two jackets and topcoat and hurrying out to the sidewalk to catch the bus – the homeless bus.

Fischer and a group of about 30 men, most lugging backpacks and bulging plastic bags, stamped their feet to hold off the pre-dawn chill in front of a D.C. shelter in an old warehouse on New York Avenue NE. Promptly at 6:35, an empty white bus, airport limo variety, pulled up. The doors opened and the men shuffled aboard for the trip downtown, to their daily rounds.

The homeless commute might be a little less refined than the one most Washington workers experience, but it is every bit as regular. Each morning, the District government operates a kind of free mini-Metro for the homeless, connecting the city’s increasingly outlying network of shelters with soup kitchens, social service bureaus and preferred panhandling blocks closer to downtown.

Plan drafted by a civic task force hopes to slash costs by getting the chronically homeless into housing. But Supervisor Antonovich calls the controversial approach ‘warehousing without healing.’

By Alexander Zarvis Los Angeles Times November 9, 2010

Prominent business leaders are putting their weight behind a plan that they say could make a major dent in homelessness in Los Angeles County, embracing a strategy that will face significant political opposition.

The blueprint they plan to unveil Tuesday seeks to put a permanent roof over the heads of the most entrenched street dwellers, then provide them as much counseling and treatment as they will use.

Because the chronically homeless take up a disproportionate share of resources, the plan’s authors argue that focusing on housing them will ultimately free up services for the many more people who need only temporary help to get back on their feet.

FORT WORTH — Long sheets of paper cover one wall in Cindy Crain’s office at the Day Resource Center.

Written on them are reminders and to-dos on everything from enhancing an electronic homeless information database to the upcoming 2011 homeless census.

“When I think of something or an idea hits me, I get right up and go to the wall to write it down,” said Crain, executive director of the Tarrant County Homeless Coalition. “I don’t want to forget.”

Her ideas are apparently good, and she must not forget much. Last month, the coalition was named the best homeless coalition in the state by the Texas Homeless Network.

The coalition distinguished itself for coordinating supportive services for the homeless and advancing Directions Home, Fort Worth’s 10-year plan to end chronic homelessness, said Ken Martin, executive director of the network.